Item C: Strategies for Transportation Funding

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being consistent with City goals and policies, and being legally defensible. However, concern was expressed about political supportability and that it was limited to new improvements that are capacity oriented (arterials/collectors). Staff reported that the City Roads Advisory Committee (RAC) is currently reviewing the City’s transportation system development charge methodology. A recommendation under consideration by the RAC may result in implementation of a reimbursement component to the transportation system development charge to cover costs that new development impose upon the existing road system. Property Taxes General Obligation (G.O.) Bonds Backed by a Property Tax Levy Subcommittee members expressed concern as to whether the City could generate voter support for a G.O. Bond or Local Option Levy, given the recent failure of the police and fire station ballot measures. It was also noted that renewal of the Library operating levy in two years would create competition on the ballot for a transportation funding tax levy. This concern was countered with the belief that voter opposition could be overcome by identifying specific improvements that would benefit residents in broad geographic areas and also by limiting the increase in the debt tax levy to specific amount. This is similar to the funding approach used by the City of Salem. The subcommittee also acknowledged that the City was very conservative in its debt practices and could afford to “leverage up” slightly for some priority funding issues. Another concern voiced by the subcommittee members was that only property owners would be responsible for paying for this funding, and not necessarily all users of the transportation system. Several subcommittee members expressed doubt as to whether G.O. bonds represented a stable, long-term funding source. The opinion was also expressed that the tax levy mechanism did not lend itself well to funding what essentially is a utility need. The subcommittee continued to examine this alternative, though the December survey showed that this alternative was rated as having a low likelihood of being political feasible. The subcommittee agreed that, regardless of the solution recommended, the Council would have a major task in educating the community about the importance of the need for street improvements. While this option was one of three that made it to the final stages of discussion for a potential funding package, it was the ultimate conclusion of the subcommittee that the City should not resort to G.O. bonds to resolve its transportation funding needs. The six subcommittee respondents assigned a low likelihood of political supportability to this revenue alternative. Local Option Property Tax Levy (LOL) The subcommittee reiterated concern that, as with G.O. bonds, the City might find it difficult to generate voter support for this option, given the competition for other levy-funded needs, such as the Library operating levy. In fact, many of the same concerns were raised around this potential funding option as for a G.O. bond levy. As with the G.O. bond option, doubt was expressed as to whether an LOL fits the criteria as a stable, long-term funding source. Five of six respondents assigned a low likelihood of political feasibility to the LOL alternative. Excise Taxes Business Tax on Fuel Distribution (Outside City Limits) At the request of the subcommittee, this option was identified for further staff analysis. The main question to be explored was whether or not the City can legally impose a tax on motor vehicle fuel distributors for sales of motor vehicle fuel to customers located outside the legal city limits. Legal counsel’s opinion was that, although the City can tax sales of fuel that occur inside its limits, it cannot tax sales that occur outside its limits. Given that the City’s authority to tax is